Lachie McColl is a specialist business valuer. In this episode Lachie provides a practical explanation of some valuation basics and makes a compelling case to get an annual valuation.

@LachieMcColl  is a #smallbusiness #valuation expert. He fell into the world of business valuations 18 years ago after working but not enjoying time as a qualified accountant.He now works from his hometown of #geelong.A core part of his business  is market research to find relevant data and help better understand what drives business values. Some of the interesting data includes;currently there is around $1.2B (billion) worth of small businesses for sale about half of those had an asking price of less than $200K\of 1.3M (million) businesses in Australia, about 60% have revenue or sales less than $200K paWe also covered;#microbusinesses are going to be valued at some multiple of the earnings or the wage the owner pulls out of ithow small businesses (worth from a few hundred thousand to maybe $5M (million) are val;uedhow to deal with the disconnect between what the #taxreturn shows the business is making vs what the 'real' return by cleansing your numbers seeing what your numbers might look like through the eyes of a potential buyer#multiples - pre-tax and pre-interest multiples normally we find around the one times to five timesWhy it's important to understand value of your business today so because then you've got the opportunity to shape the valuation in that range from one times to five times.<br /><br />The two main drivers for needing a valuation;Reactive - something has happened in your business or your life that's causing you to be either forced to get a valuation or told to get a valuation. And that'll be things like;you're going through a dispute with a business partneryou're getting divorcedyou're losing interest in your business, so disinterest If you like, the three Ds Proactive - thinking about your future. I'm thinking about;maybe exitingmaybe handing my business over to my childrenwanting to offer some equity to staffwhat  my business is worth now? how do I maximize it in two or three or four years time?The rationale for an annual valuation, in the same way as you pay for #financialplanning (at say 1% of the value of your portfolio). www.smevaluations.com.au